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Highlights—February 4, 2012

WRAL-TV (Raleigh, NC): Big job cuts coming at IBM? Don't be surprised. By Rick Smith. Excerpts: No one working at IBM, hoping to work there someday or following the company as the barometer of the global technology business sector should be surprised if Big Blue begins another round of layoffs in the near future.

To replace FTEs, or full-time employees, IBM reportedly is looking to hire contractors and temps, the Reuters news service says.

The goals: Cut costs and speed up project work.

“Internally the restructuring has been dubbed ‘Generation Open’ and staff that work for IBM on projects but are not full time are called ‘liquid players,’ according to an internal document seen by Reuters.”

So reads the news service report.

“With the move, IBM aims to accelerate the speed at which it completes projects by 30 percent and reduce costs by a third, according to the document.”

Reuters broke its story after the German newspaper Handelsblatt reported IBMers in that country faced “massive upheaval” with the Big Blue work force there being sliced 40 percent to 12,000 from 20,000. Bloomberg and Dow Jones picked up on the Handelsblatt report.

The trend to reduce workers in the U.S. and Western Europe in favor of adding jobs in lower-cost countries such as India, China and Brazil, continues.

Here are numbers for U.S. workers as compiled by Alliance at IBM, a union seeking to represent Big Blue employees (2011 and 2010 are estimates by Alliance since IBM no longer reports jobs numbers by country):

2011: *98,000

2010:*101,000

2009: 105,000

2008: 115,000

2007: 121,000

2006: 127,000

2005: 133,789

Earlier Hints: Code Words for Cuts:

Anyone paying attention to Chief Financial Officer Mark Loughridge heard the first hints of big cuts when he discussed another year of strong earnings for IBM last month.

“Now like all years, we're going to acquire and we're going to divest businesses,” he said. “We're going to invest in market opportunities and we're going to drive productivity where it's more challenging.

“We're going to rebalance our workforce to opportunities and skills aligned with our key investments and hire to drive in those growth initiatives.

“When you look at workforce rebalancing, I think it should be roughly consistent with what we've seen over the last four years. More specifically, I think, it would be more like 2010. Once again, if there's a charge associated to that, it would be offset above net income. But you put that all together, and I think we have a good hand as we enter 2010.”

IBM laid off some 10,000 people in the U.S. in 2009 and several thousand more in 2010.

Last year, some 100 people in the Triangle were cut as part of a wider restructuring.

In the January conference call (read transcript here), one analyst asked the CFO directly about “productivity enhancements” linked to offshoring.

“I know you spoke to productivity enhancements, but I'd like to, a, better understand what that is,” said A.M. Sacconaghi of Snaford Bernstein & Co. “Is that just a code word for labor migration, offshoring as a result of the headcount reductions you did at the beginning of the year, or what does it mean?”

The CFO responded with talk about “pull spend and drive productivity” and “structural takeout.”

“We're going to continue to work to spend reductions and productivity, much of that delivering within our services segment and drive value add in the customer engagement with assets, research and value-add approach,” he added.

IBM calls layoffs “resource actions,” but layoffs are layoffs no matter what kind of nice phrase the company uses.

As for “structural takeout” – watch out.

Big Blue likes to say that it is expanding its overall work force and hiring. True. Numbers are well above 400,000. But what IBM no longer discloses is how many people it employs where. By hiding that fact (it says for competitive reasons), Big Blue escapes harsh criticism about offshoring and outsourcing jobs.

WRAL-TV (Raleigh, NC): Report: IBM plans massive job cuts in Germany. Excerpts: IBM is preparing to slash its work force in Germany by 40 percent, according to a German newspaper. Big Blue workers are in for "a massive upheaval in Germany," the paper Handelsblatt reported. "In the long run this country up to 8,000 jobs could be deleted." ...

"This is confirmed by members of the highest governing bodies of the IBM," the newspaper said. "Some leading members expect a real clear-cutting." "In the end it may be that only 12,000 of the 20,000 jobs currently remain in the country's society," said a member of IBM's leadership crew, according to a Google translation of the German text.

Asked about the report, IBM told the newspaper: "Given the competitive nature of our business, we discuss the details of our planning work is not public." ...

Mein Handelsblatt (German): IBM baut in Deutschland Tausende Stellen ab (in German). IBM builds from thousands of jobs in Germany (Google Translate machine translation to English). Excerpts from the machine translation to English: The project is part of the ongoing program "Liquid", German for "liquid" that the old, rigid labor organization to transform the world into a new, more flexible, or just too volatile organization. The project has two main objectives: to reduce production costs to boost earnings per share more - from more than ten dollars in 2010 to $ 20 in 2015.

To this end, future client projects, such as advice on the modernization of enterprise software are increasingly performed in place of previously free of permanent staff. IBM wants to advertise on Internet sites such projects, where the former can then apply permanent IT developers to the job. Not the work disappears, but the current form of fixed workplace. Should the project succeed, it will be repeated in other national companies.

CIO Insight: IBM Plans to Buy Worklight to Advance Mobile Strategy. Excerpt: IBM announced its plans to acquire Worklight, a move the company says will boost the mobile capabilities of its enterprise clients. IBM signed a definitive agreement to acquire Worklight a privately held Israel-based provider of mobile software for smartphones and tablets. Financial terms of the deal were not disclosed.

Yahoo! IBM Pension and Retirement Issues message board: "Re: soon to be RAed" by "Debbie" Full excerpt: Although we tend to equate PBC 3 with being RAed, those with higher ratings are not necessarily safe from the axe. I was RAed as a 2+ performer, fully billable, with utilization of 105%.

It hardly seems like your rating matters in many cases. Almost my entire
department got laid off at the same time in May 2010. None of us were 3
performers. Two people in the department got kept and one of those kept (and
still there) was the one "most likely to be voted a three performer" by his
fellow co-workers, though I don't know what his actual rating was.

But we supported a large customer who was promised that the work we did for them
could be done much more cheaply in India. The customer was happy with this, but
asked if they could pick a few people to be kept. IBM told them "you can't pick
a person but you can pick a *function* to be kept). In our department we had
teams, 2 people supported CICS and MQ, 2 people supported DB2, 2 people
supported DASD, 2 people supported performance and capacity, 4 people supported
z/OS. The fellow we all though was a clear three performer was paired with the
one guy in the department who was a clear one performer.

The customer didn't want to lose him so selected his function to stay, which
brought the low performing guy along with him, and they are both still there and
the rest of us are unemployed. Well not totally. One person in the group has
found a job. At this point I think only one of us is really looking - the one
who was most screwed, being laid off a month before his 54th birthday, which
would have made him eligible for the 1-year bridge - so he gets no FHA, etc. and
was just diagnosed with heart problems two months before we got the axe - and
his TMP coverage and COBRA are all gone now, and still no job in sight.

IBM Project Manager in Hortolandia (Brazil): (Current Employee) “It is very exciting, but the management is poor.” Pros: The challenges are often, every time we have a chance to learn more, the projects are very interesting, but unfortunately I have an awful manager that takes me to think about a new job. Cons: We work a lot, sometimes during nights and weekends, there are no clear plans from management, when we receive the work, sometimes we are delayed already. Advice to Senior Management: The leadership needs to be closer to the employees; my actual manager just thinks about delivery anything related to the career, personal life, anything about me, I am being treated as a machine.

IBM Delivery Project Executive in Indianapolis, IN: (Current Employee) “A global company with opportunities for growth and promotion if you are driven and flexible.” Pros: Great people. Flexible work schedule opportunities. Work with people all around the world. Abundant opportunities for growth and development. Cons: Work-life balance can be a challenge. The company is always changing and looking for lower cost employees (global resources) which creates an environment of uncertainty concerning employees.

IBM Anonymous in Columbia, MO: (Current Employee) “Not as good as it used to be.” Pros: Benefits including health care insurance are available from the first day of work. Premiums for a family with kids (IBM PPO plan) are $319 per month plus $33 for the Basic PPO dental plan. The company matches 5% towards your 401(k).

Cons: There are a lot of IBMers who work from home. That's fine, but it is thing of the past. If you get into one of their Delivery Centers, do not expect to be allowed to work from home. Due to a new "process" and "framework", all work now should be done inside those centers (sort of "team work" or "team work environment"). So to summarize the Columbia (Missouri) delivery center:

no work from home

very limited-choice cafeteria with a coffee machine working only from 11AM to 2PM. They sell a cup of coffee for $1.39. So people bring thermoses.

no free coffee (no coffee makers are allowed - so you cannot create a coffee club)

no free hot water (to make a cup of hot chocolate or oatmeal). To fair, there are microwaves.

no windows (there are windows but they are frosted, so you can't see outside)

Advice to Senior Management: Have a box for suggestions. I bet you a lot of people would ask for another catering service and would love to have free coffee. We are IT folks, after all, and we drink coffee a lot.

IBM Global Data Center Program Manager in Philadelphia, PA: (Past Employee - 2012) “IBMers truly work more than 40 hours a week but overall have a good ethics especially delivering positive results.” Pros: IBM is a stable, wealthy company that has many perks including the benefit package and health insurance available. IBM employment for the most part is relatively stable.

Cons: IBMers are typically overworked providing services that exceed 40 hours a week including nights and weekends that are just expected. Balancing personal and work life can be difficult especially since the many positions are work from home. Additionally, collaboration becomes very difficult in this position since everyone must engage in conference calls.

Advice to Senior Management: IBM leadership should make more of an effort to use collaboration such as team meetings where at least once a quarter the team leads and managers can physically meet in a conference room to discuss the customer's risks, issues and new services so that there is interaction providing increased productivity and efficiency.

IBM Service Delivery Manager in Columbus, OH: (Current Employee) “I haven't been offshored...yet.” Pros: Demanding / challenging work smart. Co-workers. Access to cutting edge technologies and huge accounts. Cons: Work is constantly being off-shored. The current business model is to simplify job roles and then off-shore them to low cost labor countries. Means getting promoted is difficult, and a probability of a good salary increase is low. Advice to Senior Management: No advice, morale is horrible and I don't think anything is going to change anytime soon. They are doing what it takes in this economic/political climate to succeed. The US is hosed for the time being. P.S. When all the tech jobs have been off-shored, guess who will be next? There won't be a need for US managers when all the techs are in India.

IBM Advisory Software Engineer in San Jose, CA: (Past Employee - 2011) “The old IBM culture is totally not there. In the US, be ready for you job to be outsourced any time.” Pros: There is some good technology for a software engineer. However that technology is getting dated very fast. It is a good company to be in if you have some manager or lead associated to your job title. Managers and architects and leads do reap benefits of raises and bonuses. Financially company always makes profit.

Cons: No job security for US employees. Pay raise and bonus for technical engineers are almost nonexistent. If you are technical person be prepared to be abused especially if you are working in the US. Long hours with little or no recognition for work is standard practice. Especially in the software business unit. Technical growth opportunities just do not exist. Every year middle and upper management is looking to see how much of the work done in their groups/orgs in the US can be shipped and outsourced to India or China. The companies financial profits result in bonuses and raises only at the top.

Advice to Senior Management: Invest in producing and manufacturing in the US. The company has totally turned to a huge global services company. The upper management has no vision in establishing a manufacturing base in the US. They only seem to manage for the immediate quarter results, long term impact on the company is not something they serious consider.

IBM Anonymous: (Current Employee) “EPS is all that matters, it's a shame, Watson's gotta be rolling over in his grave.” Pros: Big company allowing you to move around to do different things within the same company. Cons: Everything is driven towards cutting expenses and cost at the expense of the employees. Employee morale is visibly as low as can be, but upper executives and management do not care, and with reason: they are making a killing buying shares back. Revenue is mostly flat, you would think investors will catch up at some point, but somehow it never happens. Advice to Senior Management: Stop focusing on EPS numbers, you will eventually destroy the company. that we all used to care about.

IBM Happy, Anager in Chicago, IL: (Current Employee) “Its OK” Pros: Clean. I don't think that we even have janitors but we might. This place is a great place to work. Cons: Pay. The pay alone is the only reason to stay. The company needs to be reorganized for sure ASAP. Advice to Senior Management: How about you all take a minimum of 5 courses at a major university on how to effectively run a company?

IBM IT Project Manager in Boulder, CO: (Current Employee) “A good place to work if you have kids.” Pros: I work from home. Flexible work schedule. Self directed. Cons: Little opportunity for movement around the company. Little opportunity for advancement. Minimal raises and bonuses.

IBM Anonymous in Atlanta, GA: (Current Employee) “IBM India WAS a good place four years back.” Pros: Some good policies of old days are still existing, like relocation benefits but they won't last long. Flexible work timings. Presence in major cities of world.

Cons: Moving away from employee caring company to employee sucking company.
Believe me, IBM US is still a great place to be in. The subsidiary companies like IBM India, rather cost center like IBM India is a glorified body shopping shop for employees they ship from India. After few years you will realize what damage they did to your career.
Compensation - That remains pathetic in India and US (IBM India only).
Health Benefits - They have increased the insurance contribution from employee to 100% in US and in India where insurance premium is to be paid by employer as per law, they have managed to reduce the coverage to 3 lakh (family) which in today's India is nothing.

Advice to Senior Management: Start caring about employees and stop treating them like machines to churn dollars.

IBM Anonymous: (Past Employee - 2010) “Worst employer ever.” Pros: Do not have to work if you can talk. Just be charming and party person and enjoy the life at IBM. Cons: Forget about your career and life. Work life balance is just talk. No opportunity to learn new technology. Be ready for your job to be shipped to India.

Yahoo! IBM Retiree Information Exchange: "Personal Learning Account" by "DJ". Full excerpt: Just found out today that if you were "lucky" enough to contribute to the IBM Personal Learning Account while you were still with IBM you are SOL now. Even though people were told they had up to two years after retirement to submit claims IBM apparently decided in the middle of December that the program was ending and that you had to submit all claims by January 30th. IF you didn't know they program ended - tough luck. You lose the IBM matching funds. And BTW - it will take until the end of February to get your money back.

"At IBM for example, we developed something called Personal Learning Accounts,
which are essentially 401(k)s for education. This program allows employees to
contribute money to an account earmarked for any kind of learning they feel will
benefit their careers. And IBM matches 50 percent of those contributions,
giving employees additional funds to pursue new skills and expertise. IBM is
currently working with members of Congress to sponsor a bill that would
encourage other companies to provide similar programs."

Gee, seems all we hear is about the worker skill gap and the inability of
Americans to compete. Record profits quarter and quarter and IBM cuts
education? Working with Congress on this?? Really?????

Charlotte News & Observer: Bill may cut overtime pay for tech workers. By Franco Ordoñez and John Murawski. Excerpts: High-tech workers across North Carolina could see smaller paychecks under an industry-led campaign to revise labor laws to limit overtime benefits. Some of the multinationals behind the effort, such as IBM and Intel, say the changes are necessary to keep jobs from going overseas, where workers in technology are paid a fraction of U.S. wages. Computer workers see it as an effort to squeeze more work out of employees for less pay in an industry notorious for killer hours and all-nighters. U.S. Sen Kay Hagan introduced the bill last fall to expand the kind of technology workers who currently are not automatically entitled to overtime. Her bill expands the pool to those whose job duties include securing, configuring, integrating and debugging computer systems, she said. ...

Jim Kerick, a client support engineer at NetApp in Research Triangle Park, has a salaried position and doesn't put in a lot of extra hours. But Kerick still is worried about the revision. He says he's been laid off three times because of industry ups and downs, and he knows no one making a living in computers and technology can count on staying in the same job forever.

When he started working in the industry in the 1990s, he worked as much as 90 hours a week. He used the overtime he earned to make the down payment on his Garner home. He's not eager to work such long hours again regularly without being compensated for it. "I'm not an indentured servant," he said. "I'm allowed to have a life."

Employers are seeking the changes as class-action lawsuits by employees seeking back pay for overtime and missed breaks have risen dramatically over the last decade. In November, California-based Oracle agreed to pay $35 million to settle a class-action suit brought by a group of California employees who said they were wrongly denied overtime pay. IBM, which is one of the Triangle's largest employers with about 10,000 people, agreed to pay $65 million in 2006 to settle claims that it denied overtime to 32,000 computer technicians. ...

Computer giants such as IBM have invested thousands of dollars lobbying politicians to clarify labor laws that would allow them to give their computer employees more flexible work schedules, but also to stop paying them overtime. ...

IBM did not respond to requests seeking comment, but Randy MacDonald, a senior vice president of human resources for the New York-based company, told Congress in July that employers have experienced an explosion in litigation. Lawyers, he said, "literally troll" for companies to sue by taking advantage of outdated provisions in the labor laws. He said the classifications must be clarified and also updated to be more reflective of employees' training and income. In today's global economy, companies such as IBM have to think about business in the context of labor costs, he said. ...

Still, it's a begrudging sort of gratitude. John Kochis, a Raleigh software engineer who has been working as a contractor, sees the legislation as part of a corporate trend toward marginalizing workers and devaluing wages. "During this recession, the companies got profitable by squeezing their people longer and harder," said Kochis, who is currently between assignments. "It's an ongoing, age-old saga of management trying to exploit the human beings that make up their labor pool."

Washington Post: Proposed jobs bill would target foreign outsourcing by U.S. companies. By Jia Lynn Yang. Excerpts: Rep. Gary Peters (D-Mich.) will introduce a bill Wednesday requiring large U.S. companies to disclose how many of their jobs are based on U.S. soil and how many are based abroad, an attempt to shed light on the number of American jobs being outsourced.

Such data is closely guarded by some of the country’s biggest multinationals, including Pfizer, Apple and IBM. Public filings by these firms disclose their total number of employees, but don’t specify where those jobs are located. Meanwhile, other data shows that multinationals overall cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009.

The Outsourcing Accountability Act would require firms with revenues over $1 billion to report how many employees they have in the United States and break them down by state; jobs abroad would have to be broken down by country. Firms would also have to track the percentage increase or decrease of these figures from the previous year. ...

Some of the companies that keep these numbers secret have lobbied for tax breaks in the name of job creation, as reported by The Washington Post last August. But without firm-specific data on where jobs are located, it can be tough for lawmakers to track which companies are adding jobs in this country.

Indiana “Right to Work for Less” Bill Passes State Senate, is Signed into Law

Alliance Charters Its 31st State: Virginia

Southern Regional Meeting to Begin on April 30

US News and World Report: How to Take Advantage of New 401(k) Fee Disclosures. Workers can use this fee information to build a bigger nest egg and maybe even retire sooner. By Emily Brandon. Excerpts: Employees will be armed with new information about the fees they're being charged in their 401(k)s in 2012. Beginning after May 31, 2012, 401(k) participants will receive quarterly statements showing the dollar amount of fees and expenses deducted from their account and a description of what each charge is for.

The fee disclosures are required by new Department of Labor rules and could provide shocking new information to 401(k) participants. A recent AARP survey found that 71 percent of 401(k) participants think they don't pay any 401(k) fees at all. "I think some people will be surprised about how much some of the investment options charge," says Mary Ellen Signorille, an employee benefits attorney for AARP. "Some plans charge each individual basically an account maintenance fee. The changes are perfectly legal, but some people may not have known they were being charged the fee." Among survey respondents who know how much they pay in fees, the most common fee range is between 1.1 percent and 5 percent of their account balance annually.

The Fiscal Times: The 10 Best Part-Time Jobs for Retirees. By Jennifer Lawler, Bankrate. Excerpt: If you're at or near retirement, you may find that a part-time or occasional job would make a big difference to your budget. Beyond paper routes and baby-sitting, how can you make a few extra bucks on the side? Here are some good options you might not have considered.

Bloomberg: Apple Fuels Silicon Valley Hiring Amid Bubble 2.0 Concern: Tech. Excerpts: Among U.S. technology companies with a market value of more than $100 million, almost 50 increased employment by more than half in the most recently reported two-year period, according to data compiled by Bloomberg. Some small and mid-size businesses boosted payrolls by almost fivefold, underscoring the resilient demand for Internet services, software and electronics. ...

While the broader unemployment rate dropped to 8.5 percent in December, reaching a three-year low, few companies outside of technology have as voracious an appetite for workers. In the software and services industry, 74 companies with more than $100 million in market value expanded their workforce by at least 10 percent. That was more than any other industry group measured by Bloomberg. ...

Apple Inc., Google Inc., Amazon.com Inc. were among the companies that increased their workforce by at least 50 percent in the past two years, Bloomberg’s data showed. The growth has prompted Silicon Valley companies to consider more people from nontechnical backgrounds and ramp up recruitment everywhere from Wall Street to Seattle. Workers who would have shied away from the volatility of 1990s-era startups are seeing the technology industry as a haven of stability.

BenefitsPro: Baby boomers are reaching age 65, but are they actually retiring? By Amanda McGrory. Excerpts: As baby boomers are beginning to reach retirement age, many are ready to let go of the corporate life and retreat to the golf course. But as nice as that sounds, retirement often isn’t the reality. In fact, 39 percent of employees plan to delay retirement, and of those employees age 50 and older, 46 percent expect to do so, according to the recent Retirement Attitudes Survey by Towers Watson, a global professional services company in New York City. Among the surveyed older workers planning to delay retirement, they anticipate working at least three more years while 28 percent expect to work an additional three to five years. Another 33 percent of surveyed older workers plan to work an additional five years or more.

What are the causes of postponed retirement? Many retirement hurdles stem from the newer employer-sponsored retirement models that are based on a defined contribution plan, such as a 401(k), says Mark Davis, senior vice president of CAPTRUST Financial Advisors, a financial advising firm in Raleigh, N.C., and a member of the American Society of Pension Professionals & Actuaries. Past generations funded their retirements with defined benefit models, but baby boomers are the first population segment to experiment with defined contribution plans, which first showed up in the late 1970s and became prevalent in the 1980s. Given this newer model, there still are questions as to how effective defined contributions will be for lasting retirement. ...

Health care is another issue that is causing many baby boomers to delay retirement, Glickstein adds, especially for those who are under the age of 65 and not yet eligible for Medicare. For pre-Medicare retirees, although 80 percent of employers offer a pre-Medicare subsidy, 51 percent of those employers have a subsidy cap, according to the Retiree Health Survey, conducted jointly by Towers Watson and the International Society of Certified Employee Benefit Specialists. Sixty-three percent of respondents report that 2011 plan costs surpassed the cap, and another 15 percent of respondents believe those costs will top the cap within two years.

Forbes: The Fed's New Tax on Retirees. By Rick Ferri. Excerpts: Last week, the Federal Reserve rolled out their inflation forecast and interest rate intentions through 2014, and it’s not good news for retirees or anyone else who relies on interest income. The yield on money market funds, CDs, and other fixed income investments will likely remain well below the inflation rate for the foreseeable future. This financial repression will result in a trillion dollar transfer of real wealth from fixed income investors to the persons, businesses and governments borrowing at below free-market rates.

Inflation is a tax, even if the inflation rate is low. The Federal Reserve Board Members and Federal Reserve Bank Presidents are projecting long run inflation to be 2.0 percent, although this year the rise is expected to be slightly lower. Combine the Fed’s inflation target with their intention to leave short-term interest rates at rock-bottom levels through late 2014, and the result is an onerous phantom tax on the owners of CDs, money market funds, bonds, and bond funds.

People who own fixed income investments in the U.S. are disproportionately retirees and persons nearing retirement. Thus, the Fed has created a “retiree tax.”

Business Insurance: Alaska eyes giving state workers choice between DB, DC plans. By Kevin Olsen. Excerpt: A bill introduced in the Alaska Senate would allow new public employees to choose to participate in a defined benefit or defined contribution plan. The bill calls for a new defined benefit plan tier following backlash from 2006 legislation that made Alaska the first state to switch to an all defined contribution plan structure for new employees.

New York Times opinion: The War on Organized Labor. By Andrew Rosenthal. Excerpts: You have to admit that the Republican Party is organized, methodical and persistent – especially if you’re a Democrat, because your party is pretty much the opposite.

Slowly but surely, across the country, Republican governors and state legislatures are making progress in their war against labor unions, especially ones that represent public employees. Just yesterday, there was bad news from two states.

In Indiana, Gov. Mitch Daniels signed a bill making Indiana another “right to work” state, which is one of those slogans, like “pro-life” and “family values,” that sounds unobjectionable, but isn’t. That law is relatively simple: It prohibits labor contracts from requiring workers to pay union dues. The spin is that this is better for everyone. The truth is that it is not only bad for labor but also bad for the economy.

Unions will reduce a company’s profits somewhat, because they get higher wages for workers. But economists have found that unionization has a minimal impact on growth and employment. Six of the 10 states with the highest unemployment have right-to-work laws in place. North Carolina, which has the lowest unionization rate in the country, 1.8 percent, also has the sixth highest unemployment, 10 percent. ...

Unions have over-reached in many ways, clinging to wage-and-benefits agreements that are simply untenable in today’s economy. But they are fundamental to maintaining fairness for workers. And governors in many states, including New York, have managed to get concessions from public employee unions without outlawing them.

EE Times: Viewpoint: The R&D credit doesn't work. By Michael Rashkin. Excerpts: The R&D tax credit expired on Dec. 31, 2011, and its passing produced hardly a noticeable ripple throughout the high-tech industry. That’s not because American business doesn't miss the financial benefits from this tax incentive, but because many companies understand that it’s only a matter of time until Congress again revives it. Congress has frequently let the credit expire, then acted to reinstate it retroactively.

But what is the value of this credit? And does it make sense for Congress to restore it?

The research credit has been in existence for over 30 years. During that time, not one company has announced an invention or product that was produced as a result of the R&D tax credit. Unlike government subsidies that have gone to the Defense Advanced Research Projects Agency, the National Science Foundation or the Energy Department, we taxpayers have nothing to show for our investment in the research credit.

AlterNet: What Liberals are Still Missing About Inequality: Decades of Outsourcing and Union-Busting by the 1%. Many of America’s most liberal mainstream pundits have narrowed the debate over inequality, perhaps out of a desire to shield Obama from pressure coming from his left. By Roger Bybee. Excerpts: The richest 1 percent did not triple their share of the nation’s income during the last three decades—to the current 24 percent—simply through the tax system alone. Nor did the tax system allow the wealthiest 1 percent to capture nearly 9/10 of productivity gains in recent years, representing a $3 billion upward shift in income.

American media employ a disproportionately large share of pundits who either deny or defend the riches accruing to America’s "job creators”—ranging from the outraged George Will to the sly discounting of the problem by NPR’s Adam Davidson. They are accompanied by a chorus of leading voices—Thomas Friedman and Fareed Zakaria, to name just two, who gloss over the inequities caused by global corporate supremacy.

Even the supposedly liberal pundits—E.J. Dionne, Howard Fineman, Jonathan Alter, Ezra Klein and Richard Wolffe, among others—are remarkably confined in their discussions of inequality. They almost never refer to the 35-year campaign of union-busting by Corporate America, in which 90 percent of union organizing drives are greeted with high-pressure resistance from management, according to Christopher Martin's 2003 book on media coverage of labor, Framed!. ...

Yet the liberal politicians and media voices who should be challenging the role of free-trade and union busting in driving down wages and increasing inequality have almost uniformly remained silent. While liberal on a wide variety of issues, pundits like Dionne and Wolffe continue to adhere to the free-trade faith without examining its consequences in lost jobs, depressed wages and devastated factory towns. ...

Without any audible and visible pressure to aggressively move to lift wages and control the export of jobs, Obama will simply fall back on pleading with executives to engage in “insourcing” jobs, and then exaggerate the importance of a minor, perhaps inconsequential, trend. But most of the public, wary of free-trade agreements, knows that the trickle of jobs returning to the U.S. is far smaller than the torrent headed to China and Mexico, a torrent that continues to decimate the families and communities that were once part of the nation’s strong industrial base.

USA Today: Some top military brass making more in pension than pay. By Tom Vanden Brook. Excerpts: Previously , the maximum annual pension was based on an officer's pay at 26 years of service. Now, a four-star officer retiring in 2011 with 38 years' experience would get a yearly pension of about $219,600, a jump of $84,000, or 63% beyond what was once allowed. A three-star officer with 35 years' experience would get about $169,200 a year, up about $39,000, or 30%. ...

The highest pension, $272,892, is paid to a retired four-star officer with 43 years of service, according to the Pentagon. Before the law was changed, the typical pension for a retired four-star officer was $134,400. The top pay for an active-duty officer is capped at $179,900; housing and other allowances boost their compensation an additional third. ...

The Project on Government Oversight, which looks at waste in government, said the pensions were too much. "At a time when the Pentagon is struggling to pay for the men and women who actually fight wars, and is shrinking the size of its fighting force and civilian employees, it doesn't make sense to nearly double the size of a retired four-star's pension," said Nick Schwellenbach, director of investigations for the group.

Time: Pension Income Is Guaranteed, Right? Yes, But… By Dan Kadlec. Excerpts: As if we needed another reminder that our safety net is threadbare, AMR Corp., the American Airlines parent company, says it will shut down pensions covering 130,000 employees and retirees as part of a reorganization in bankruptcy court. A government backstop is in place to keep most pensioners whole—but not all of them, and the backstop itself is rickety.

We all know the sad funding state of Social Security and Medicare. We’ve seen traditional pensions swapped for less reliable 401(k) plans. AMR proposes just such a swap. Last year, sponsors filed to terminate 1,425 fully funded pension plans. ...

So the backdrop isn’t pretty. Still, AMR and other pensioners under PBGC care are in no immediate danger—unless they are among the 15% whose pension benefits exceed PBGC limits. On average, pensioners who exceed the PBGC limit end up seeing their benefit slashed by 28%.

Washington Post: American Airlines’ plan for pension bailout draws criticism. By Steven Mufson. Excerpts: American Airlines has saved $2.1 billion since 2006, thanks to two congressional measures that allowed it to reduce contributions to its pension plans. The company said it would make up any shortfall later.

Later has come, but there’s been a change in that plan.

American Airlines, whose parent company filed for bankruptcy in November, said this week that it wants to terminate its four pension plans for 130,000 workers and retirees and ask the federal government’s Pension Benefit Guarantee Corp. to bail out its unfunded pension obligations to the tune of $9 billion. It would be the largest PBGC bailout ever. Without the congressional relief, the gap would have been smaller, the PBGC said. ...

“American and other carriers have repeatedly asked Congress to give them funding relief in the last six years. More than $2 billion was diverted from their pension funds to their bankruptcy war chest,” Josh Gotbaum, director of the PBGC, said Friday. “In effect, the Congress of the United States and the employees of American Airlines provided half of the money to sustain American in bankruptcy.” ...

The PBGC’s Gotbaum, a former investment banker, spent two years as bankruptcy trustee for Hawaiian Airlines, ultimately restructuring the company, repaying creditors and preserving defined benefit pensions.

“We know that other airlines have successfully restructured, preserved their jobs and kept their pension plans. We don’t see why American can’t, too,” Gotbaum said Friday. “We hope that before American takes the drastic action of terminating the pension plans covering 130,000 American employees that it tries hard to find an alternative and shows the world that there is no other alternative.”

“This is not a case of runaway labor costs. This is a case of poor management,” Jamie Horwitz, spokesman for the Transit Workers Union, said. He pointed to infighting among top executives and the bankruptcy filing’s revelation that the airline bought a $30 million London home for Tom Horton, who recently became the company’s chief executive. “I’m a little bitter,” said TWU International President James C. Little, who had just negotiated concessions and was about to bring them to a vote of the union’s 26,000 American workers. “I’m very frustrated at American’s going to go to court and use the bankruptcy process to terminate the plan.”

New on the Alliance@IBM Site

IBM’s shift in workers is not about skill or job rebalancing. Sam is replacing older American workers with low wage college hires, as well as contractors and foreign workers who are typically young, male, and without benefits. The global employee count is almost 500,000, but the decimated American count of 105,000 in 2009 is now estimated to be about 98,000.

Sam is not retraining Americans. He says IBM spent $600 million training and retraining “and people can’t move up the skill ladder. So we have to replace them. I think it appropriate and fair. You give them the opportunity to reboot and help them transition. But if they don’t do it, then they don’t do it.” This rationalization is disturbing and untrue. It shifts responsibility for being fired to employees saying many tens of thousands of Americans are not able to learn.

Instead, while the HR team and written performance objectives require employees to create skill plans, which are used as a determinant as to who is fired, the business end for years has told us there is no longer a training budget. Skill plans and mandatory conference calls that detail improved, sophisticated career path programs are ignored and replaced by the rare approval for a class or conference for a few employees. Paranoia to cut costs is so strong my manager repeatedly chastised me for spending $30 on a company course I had thought was free. The truth is, IBM would not train Americans already targeted for replacement because they are considered expensive – the reason for offshoring so many positions they want filled by low wage workers. The flood of layoffs attests to this. Many laid off employees are required to train their foreigner replacements to do their job. This demonstrates they have the skills.

Then, it does not matter what skills an American has.

IBM employees typically find their next project by applying to internal job posts. “Americans need not apply” seems apt. An email reply to an application for a job in my neighborhood stated that the first group considered is foreigners. It reads, “The cost difference is too great. IBM India may not have visa ready resources with the specific skills, so many times U.S. resources do fill seats”.

I rebooted, Sam, and spent my money and time aggressively building skills. I was ambitious enough to be certified in two IBM professions. I became an IBM Advisory Project Manager and was PMP certified, one step from being a Sr. Project Manager. I became a Master IT Specialist. My performance reviews were consistently above expectations. I graduated summa cum laude. But no executive mentored me and provided opportunities for advancement or transition in career path. Nor was I offered a demotion to stay employed. I was in the wave of mass layoffs in 2009. It was especially nonsensical when a colleague, who was recently promoted and had the highest performance rating, got the call saying he was in the layoff. He had just received a contract extension on a customer account and was making money for IBM. Neither the IBM account executive nor client knew this would happen. This is not unusual.

I was one of the few who found a posted position that could keep me employed. I saved the chat script with the IBM manager saying she wanted me for this internal job under the IBM CIO office. Headquarters denied me this position saying it was marked to be offshored. An American expert in a twin job for years lost his job for the same reason.

Sam, your layoffs are mean-spirited robbery. The last work day is 4 days or so before month’s end so we lose a week of earned vacation pay. IBM’s “stealth” layoffs skirt the Warn Act with small numbers at many locations on different dates. Instead of 60 days notice and pay, we get 30. This unfairly gives IBM a massive cost savings as we are kicked rudely to the curb.

Perhaps IBM will slow down throwing away American employees like yesterday’s news with the new generation of college hires. They will not saddle IBM with costly benefits because employees now largely shoulder the funding and risk. Or will cheaper foreign and contract workers replace them after a few years of salary increases and aging skills? As a nation, the least we can do is stop subsidizing companies with tax break rewards for offshoring our good jobs.

Comment 01/29/12: The word at the watercooler is that Retail (RSD) SSRs will take a bullet come March. Retail is no longer part of the big picture. -Anonymous-

Comment 01/30/12: The voice from the UK here... Just complained to my second line manager, not about my PBC rating as I know that that is just a load of bull... But about the process behind the scores given. My PBC should have been based mainly on our performance against set Business goals, but I was given my PBC result 2 weeks before the Business Results were released. So I demanded that management provide me with the documentation which outlines the rules around awarding PBC's. Second line managers response was to tell me 'not to rock the boat'. When I advised him that I will be taking this matter to HR, unless someone did something to put right this faulty process.... He nearly exploded, with some of the most colourful language I've heard for a long time.... I have a appointment with HR at the end of this week... I'll let you know who I get on. - No Name.. Just a Number!!!-

Comment 01/31/12: Has anyone ever received a significant pay cut at IBM? Our group of 250 in Jan. 2009 got our base salaries cut by 17% and we never saw it again...I am tired of this company. -AcquiredbyIBM-

Comment 01/31/12: -No Name.. Just a Number!!!- Good for you! Let us know how it turns out. Thanks for standing up for what is right. You have already helped the cause for employees by setting up a meeting with HR and doing what is right. -No Name in the US-

Comment 01/31/12: Project "Malle” in force as of today in the Canadian GDF. Mostly changes at the first level manager level. They’ve split their job in 3 : HR management (PBC, etc.), delivery, and “portfolio” manager (this one is placed between the DPE and the delivery teams, similar to a SDM). The technical teams may also be split in two between the doers on one side and architects and SME on the other. Still a lot of details to be decided for the final structure. This exists it seems because DPEs have lost contact with all the delivery teams spread across the world. I do not see how a more convoluted management structure will help to save costs… And we all know were the cuts are going to come from, somebody has to pay for these new positions. -CANonymous-

Comment 01/31/12: 2015 Roadmap. If no one is paying attention to it you should. Tens of thousands of USA jobs in IBM will be gone. As well as your stock bonus that Sam and now Ginny still dangles like candy in front of you. If you get it your a lucky survivor. PLEASE, PLEASE do something for yourself and your fellow IBMers. ORGANIZE and do it now! Try to reverse or at least slow the 2015 Roadmap job reductions which will soon come. -2015-

Comment 01/31/12: -No Name.. Just a Number!!!- I'm experiencing the same hostility from my 2nd line manager for contesting my rating, he is totally disrespectful with me for challenging their decision, I have a meeting with HR in a couple weeks, will let you know if HR is really impartial as they claim to be... -Anon-

Comment 01/31/12: From the UK. Hear more PBC 3 than ever before, yet met business goals... i will be appealing against this unfair system and i exceeded all my objectives and performed higher in terms of cost savings against my peers...perhaps its because I'm over 40 and have over 12 years service under my belt and they want young grads to take my job....was such a nice place in the mid the late 90's.... wow this company is so different -A UK Number-

Comment 01/31/12: I was a second line manager in IBM. PBC rating For all of you IBMUS employees. Just cut and and paste your last year PBC evaluation. You are already rated by 2nd line managers at the beginning of the year. PBC ratings have already been established by 2nd line managers and corporate. Each division is given a percentage of employees that are to be RA at the start of each year. Corporate uses the PBCs tool to downsize and RA employees. This entire system is corrupt. Stop complaining and join the union. -ANA-

Comment 01/31/12: ST (SameTime) dev has been shipped off shore, so if you were in the US ST dev team, you are now looking for another job. -GettinHosed-

Comment 02/01/12: "...if HR is really impartial as they claim to be..." HR is not impartial. They exist to protect the company. Period. The only way you will ever get some partiality is to join a union who will go to bat for you with some clout against HR. It is called a grievance. There are plenty of articles and books on the subject of companies and corporations Human Resources Depts. which discuss and reveal it all -HRed-

Comment 02/01/12: IBM Germany announced this morning job cuts of up to 8000 of the current workforce of 20000. -Mr. Worried- Alliance reply: We are also getting that information from the IBM Germany union. The job cuts in Germany must, by law, be negotiated with the union. It is very different than what happens here.

Comment 02/01/12: I have figured out what PBC stands for... Performance Bell Curve. I was ranked "1" in 2009, "2" in 2010 and now "3" in 2011. Moving through the bell curve with velocity... -2015 Roadmap Roadkill - Alliance Reply: Actually it stands for "Personal Business Commitment"; but whatever you believe about how it works, you should also know that it is a stacked deck and a tool for IBM to do RA's as often as they please, because you have no binding employment contract that protects you from IBM's abuse and injustice toward their employees. Join the union and organize. Fight back collectively, not as an individual. Make a commitment to yourself to make a change.

Comment 02/01/12: Anonymous 01/29/12 asked why the RA name list has to go to IBM legal: "If IBM is doing everything legally since workers are 'at will employees' what is IBM afraid or scared of?" Because even at will employees are protected by antidiscrimination laws. IBM tries to avoid lawsuits (especially the age discrimination suits they've had in the past). Therefore, months before each RA, a preliminary list, larger than the target number, is sent to legal to check the distribution; if necessary, the distribution is adjusted by moving names around in the list. Finally, some edge cases are taken off the list to reduce it to the target number. On RA day, each victim gets a list of "Selected" and "Not Selected" numbers by position and age, which is supposed to show enough age balance to discourage suits. (All victions should send that list to Alliance: it's the only way we know layoff numbers.) -Gorya-

Comment 02/01/12: After visiting this site on and off for a number of years, today I joined the Alliance. I was SameTiming this morning with an associate who told me they were RA'd and in the process of training their replacement in South America. Appalling.

My PBC rating did not change despite my going above and beyond the call of duty and donating my entire summer to a project that made the customer extremely happy. I met all of my goals and exceeded in some areas. I know of at least a few people who are extremely unhappy with their PBC ratings this year. I don't think I could ever match the amount of time and dedication I put into that project so now I am left with a sense of disappointment and bitterness with the entire process.

I'm not playing 'poor me' but simply have taken off the rose colored glasses and realized that the cards are indeed stacked against the US worker and it is but a matter of time before that Friday afternoon when your manager pings you and asks if you can "talk". Everyone I work with is in survival mode. We are all just putting our heads down and doing our work. It is not supposed to be like this. The customer is unhappy. They want back what they had. When they had a person/team behind their account who they could call and reach out to. Not opening a ticket that gets dumped into a queue that some boob halfway across the globe will take 3 days to figure out and complete.

I suggest everyone that is on here reading about the cuts and the injustice being served to us...join and see if we can make a difference. To me it is worth $10 a month. Good luck everyone. -DisappointedIBMer-

Comment 02/01/12: The liquid worker is being implemented... Internally the restructuring has been dubbed "Generation Open" and staff that work for IBM on projects but are not full time are called"liquid players," according to an internal document seen by Reuters. IBM-planning-major-job-cuts Better get your act together ... those that are left.. -Ich Bin Muede-

Comment 02/02/12: If IBM wants to cut approx. 40% of German IBM employees then the 2015 number of only having about 60,000 USA IBM employees is believable. So 40,000 USA employees or so could very well be gone in just three short years. And tens of thousands of IBMers still employed will not do anything about it. They can try to do something about it: THINK UNION -HatchetAComing-

Comment 02/02/12: Seems they are making pre-RA calls today in Lotus. Employees are being spoken to and encouraged, ASAP, to find jobs outside the organization. I would imagine the ones who don't find jobs are the ones who get axed? Guess I'll find out... -IBMerSince99-

Comment 02/02/12: Where can I find compensation numbers for union officers. want to join but also want to see where my contributions go. -curiousfuturemember- Alliance Reply: At this point Alliance officers are unpaid volunteers and have been since our founding in 1999. Once a union is certified through an election and recognized by the company then they "could" be paid. We have 4 officers. We also have 1 full time staff person, our national coordinator, and 1 part time IT Administrator. They are paid mainly with funds from our parent organization CWA. Our budget is very low. We need dues for office expenses, organizing and outreach. Looking forward to you joining!

Comment 02/02/12: "...staff that work for IBM on projects but are not full time are called "liquid players," according to an internal..." This is the "Liquid Portal" model that IBM has been using for a year or two now. The intention is to eliminate employees and use individuals to complete software projects for minimal pay. The typical compensation that I've seen being offered is under $1000.00. Once you take out the self-employment taxes, federal income taxes and state income taxes you are left with chicken feed. Your only real way to combat this is to unionize in the USA and internationally. -anonymous-

Comment 02/02/12: Last Friday everyone at IBM East Fishkill NY including employees,vendors,& management. Received a outside email from the Alliance: PBC lowered? You are not alone. Wondering if employees from other IBM sites received this same note as well? Perfect timing for those who just received their PBC "3" appraisal rating. This note left management red faced and in a tail spin. Great on getting the word out! -YOU ARE NOT ALONE-

Comment 02/02/12: Only purpose of the Liquid Portal (see also topcoder.com) is to attract freelancers (designers/developers/testers) from BRIC countries with no strings attached, 1K is a lot of money for them, it is shocking dedicated onshore(20%) / offshore(80%) resources are being replaced with offshore freelancers. PBCs are a measure of how needed/convenient you are as an employee, absolutely nothing to do with your accomplishments, 1st lines have very little say, very sad but true. -anonymous-

Comment 02/03/12: Collective Bargaining has been villainized in the US as has fighting against constitutional breaches. As an American working for the IBM Machine abroad (Germany), I am happy and proud to say that labor unions have not been demolished here and that at least to some degree corporate beasts are still tamed by a government with a social conscience. -neo-

Comment 02/03/12: Left IBM voluntarily, and never regretted it. Still a dues-paying Alliance member though. It saddens me to see the same discussions here, repeating like clockwork: "RAs are coming!" "Where?" "When?" "How can this be fair?" I must assume that my ex-IBMers are just plain stupid, or sheep, or both. You remaining folks have only two choices, IMO:

Form a union, and try to fight this constant erosion of your benefits, salary, and job security.

Leave, and deny IBM your training and expertise, all of which are eventually going to be put to work training your cheap offshore replacements.

How can any of you stay at this company and not join the union? By your inaction, you support their strategy of shedding American jobs, and weakening the American jobs that remain with them. By your complacency, you tacitly approve of what they do. By your silence, you aid and abet the destruction of your, and your fellows' jobs. -irRational-

Comment 02/03/12: irRational: You are 1000% correct in your observations. I am also a dues paying member and no longer an IBM employee. It still amazes me why IBM employees don't join the Alliance at least as a subscriber. -sby_willie-

Comment 02/03/12: Now that a slew of IBMers got the "PBC cut" e-mail from the Alliance in their company Lotus Notes e-mail when are these folks gonna act on it? Or are the vast majority of IBMers the "don't rock the boat" suck ups? These types of employee IBM craves and wants. These types IBM does one thing to: RA. Believe me, I don't have specifics, but as surely the sun rises in the east and sets in the west, RAs are coming soon. You can bet your job on it. -anonymous-

Comment 02/03/12: I like the enthusiasm and angst that some of you have made clear in your assertion to Join the Union. I wholeheartedly agree. But make no mistake; once you join, you need to take action and let IBM know you mean business. Concerted effort to grow the membership while publicly demonstrating or handing out leaflets or rallying in some way, or writing letters to your local newspaper's editor, or having meetings with other members to pinpoint strategy and next moves. This is called activism for a reason.

Just joining and paying dues is not enough, if you want the union to grow and be able to push back against IBM and its image in the public eye. Reveal the practices of executive management. Expose their lies to people inside and outside IBM. Throw their policies back in their face...but do it all within the law and within the rules of union organizing. Don't know all those rules? Ask an Alliance staff member. They know the rules, and they know what IBM doesn't like but can't do anything about.

Once you begin to act and speak as a collective voice, the power of that action begins to take effect. I'm a union member and I know this is true. 45,000 CWA Verizon workers did just that, last year and Verizon caved in and came back to the bargaining table.... Yes, it's true that CWA Verizon union members already had a contract, but the point is that they acted together and demonstrated to Verizon that their strength and skill together was greater than executive management's stubbornness. Get busy fighting for your job, or get busy losing it. -Tyler Durden-

Comment 02/04/12: Folks, if you are not already convinced that a union contract is needed, read this paper from IBM Watson Research: https://researcher.ibm.com/researcher/files/us-msridhar/foser061-bacon.pdf and this newspaper report from 2009: topcoder-names-nicholas-m-donofrio-to-companys-board-of-directors These are clear indications that IBM started the transformation to GenerationOpen a long time ago. Unless you have an MWL (Master of Workforce Liquidation) there is no place for you in this new IBM. Even low level line management (1st & 2nd) is not required when you use the liquid workforce paradigm. You just need a couple of product managers. Be smart in a smarter world. Protect yourself. Organise! -anonymous-

Comment 02/04/12: Folks, just look at the number of IBM US employees over the last 6 years: . 2006 - 127K. 2007 - 121K. 2008 - 115K. 2009 - 105K. 2010 - 101K. 2011 - 98K. You don't need a Harvard MBA to see a trend there. Good old Sammy figured out a way to keep the stock price up. He cut cost by firing US employees. There is one problem with Sammy's plan. What do you do when the number gets to zero? Don't let Ginni continue to execute Sammy's plan. Support the Alliance and organize now before it is too late! -ScrewedBySammy-

Comment 02/05/12: @"More Jobs at IBM": Job openings may not really mean much. If they are really hiring, this could be to replace people that were fired and now they try to hire for a fraction of the wage. But actually it may not even mean that they are really hiring. Big companies use decoy job openings as PR tools. It doesn't cost much to post non-existent jobs but you will get positive coverage in the media, as you can see from the Forbes article. People like you and (local) politicians will be puzzled or even think that they need to support IBMs strategy, because they are hiring. If IBM doesn't really fill the openings, they can claim that they did not find suitable applicants and that they need to hire from abroad or fill the jobs in countries where the skill is available.

PR means to create a favourable opinion in your local environment. Further tools that the PR departments use are pre-wirtten articles that go to the media at the same time as they pay for adds, positive reviews in e.g. GlassDoor and more things of this kind. Is it ethical to manipulate in this way? I wouldn't thinks so but that doesn't matter for a company that needs to keep the promises of the agenda 2012. So here the question is, do they only post job openings or are they really hiring in Miami, NYC, ... -anonymous-

Comment 02/05/12: IBM UKer's, If you want to find out the discussions your managers are having behind your back, you can use complete a freedom of information request and get all the information IBM holds on you. You can also name individuals who are required to supply copies of emails etc they hold with your name on. You may be very surprised what you can find out. You may also want to consider joining UNITE to get access to legal advice and support. Good luck with the fight. I'm in the process of challenging my PBC and the process itself. -UK IBMer-

The Republic (Columbus, Indiana): Medical debts put patients at risk of financial collapse. By Lindy Washburn. Excerpts: Frances Giordano found out she had lung cancer in June. After that, the bad news just kept coming. First, she discovered that even with a good job and health insurance, her medical expenses were more than she could afford on disability. Then she started slipping into debt, like millions of other Americans who don’t have the cash to cover their medical bills. Hospitals expect to be paid promptly and offer little leeway to insured patients. Unpaid bills go to collection agencies, damaging a person’s credit history for years.

Finally, she learned that fighting for her life was not her only battle or maybe even her toughest. When she finished her chemotherapy in December, she was fired. “Due to changes in business operations,” wrote her employer of more than six years, “We can no longer hold your position open.” ...

The crisis in American health care is not limited to hospital emergency rooms where uninsured people wait for care. It also is found in a neat, three-bedroom house in Dumont, N.J., occupied by a widow who worked full time, raised two kids and likes to get her nails done occasionally.

In less than a year, Giordano lost her health and her job. Now, she’s afraid she’ll lose her good credit and her health coverage. ...

Giordano had health insurance throughout her illness. She didn’t have to beg for treatment and was not denied it. She loves the surgeon and oncologist and nurses whose care, she hopes, will give her many more good days with her first grandchild, born in July. But she may be ruined financially. In this country, people can go broke if they get sick.

Washington Post: When health plans go high deductible. By Sarah Kliff. Excerpts: As health costs rise, employers are increasingly turning to high-deductible health plans: Insurance coverage that usually pairs catastrophic coverage with a health savings account, leaving consumers to decide what to spend that account on. The goal is to give consumers more incentives to not spend on the care they don’t need, but these plans often raise concerns that subscribers will cut back on the care that they do need, too. A new study from a team of Harvard researchers explores how health insurance plans with high deductible effect the care that families do, and don’t, seek. ...

Overall, the study found that individuals in high deductible plans did tend to delay care at a greater rate than those in more traditional plans. But even more interesting was who was delaying the care: In families where the child had a chronic condition, the healthier adult tended to be the one reporting holding off. For those with an unhealthy adult, however, it was the opposite: Care for children got delayed. These effects were even more significant for lower income families, as you can see in the chart above, tended to delay care at higher rates.

New York Times: Health Insurance Deductibles Doubled in 7 Years, Study Finds. By Ann Carrns. Excerpts: Total premiums — the amount paid by both employers and workers combined — for family coverage rose 50 percent from 2003 to 2010, to nearly $14,000 a year, the study found. (The fund is a private foundation that researches health policy issues. The report includes an interactive map showing premium increases by state.)

Workers, meanwhile, are shouldering more of that burden. Their share of annual premiums increased by 63 percent over the same period. In 2010, employee premiums for family-plan coverage averaged about $3,700, up from roughly $2,300 back in 2003. As a result, “many working families have seen little or no growth in wages as they have, in effect, traded off wage increases just to hold onto their health benefits,” the report found.

What’s more, employees are paying more for less, because of higher deductibles — the amount workers pay out of pocket before coverage kicks in. The average family deductible nearly doubled over the seven years studied, to almost $2,000 in 2010.

Washington Monthly: The Quiet Triumph of Obama Care. By Harold Pollack and Greg Anrig. Excerpts: Here are five concrete realms in which the Affordable Care Act, which won’t even take full effect until 2014, has already had an impact:

About 2.5 million more young adults are now insured because of the new law. The Affordable Care Act allowed individuals up to age 26 to remain on their parents’ employer-based insurance plans with substantial protections for individuals with preexisting conditions. ...

Older Americans have stronger prescription drug and preventive care coverage. The Affordable Care Act requires drug companies to provide seniors with a 50 percent discount on brand-name medications when they face the “donut hole” in the Medicare Part D drug program. As a result, 2.65 million Medicare beneficiaries have saved more than $1.5 billion on their prescriptions - averaging about $569 per individual. ...

Individuals with pre-existing conditions have greater access to coverage. In addition to the above-noted protections for young people, lifetime coverage limits on most essential benefits are now banned, with annual dollar caps phasing out. ...

Structural changes are already making the health care system more efficient. A recent survey of companies by the benefits consulting firm Mercer found that “employers are accelerating their efforts to bring health benefit cost under control,” with the anticipated spending per employee expected to increase at its lowest rate since 1997. ...

The Affordable Care Act brings greater fairness, transparency, and integrity to private insurance. The ACA changes the basic business model of private insurance. Firms will no longer prosper by cherry-picking healthy consumers or denying coverage for basic care. The federal government now partners with states in scrutinizing large insurance plan rate increases. Such heightened public exposure and regulatory scrutiny has already induced major plans to moderate or to reverse large rate increases.

But it gets even weirder from there. Now the insurance industry is trying to kill the idea of even giving you a choice of a public option. Who could be against the idea of giving you a choice of either keeping your existing health insurance, or having the option of a government-run insurance plan (especially to people who have been turned down for insurance)? We are talking about something like Medicare, but which would be available to all those people that private insurance companies refuse to cover. If we can’t have the single-payer system we want, could this be a reasonable compromise?

But like a jealous lover, the insurance industry doesn’t want you to be able to get health insurance from anyone, even if they turn you down! Take the recent argument from Senator Chuck Grassley (R-Iowa). Grassley argues that a public insurance option would be so popular — that people would prefer it so much over private insurance — that it cannot be permitted. The private insurance industry is so important (at least to his campaign contributions) that he would prefer that people die rather than give them the choice of a public plan!

Wall Street Journal: Obama Says Seniors Have Saved on Medicare ‘Doughnut Hole’. By Louise Radnofsky. Excerpt: Under the law, drug companies have to offer discounts on brand-name and generic drugs for Medicare beneficiaries after they reach the gap. Discounts increase annually until 2020, when the hole is supposed to be filled entirely. In 2010, the first year when the discounts were in effect, seniors also got a $250 rebate check if they hit the doughnut hole. The 2011 discounts — 50% on covered brand-name drugs and 7% on generic drugs — were worth an average of $631 per person who did reach the doughnut hole, the Department of Health and Human Services said. Democrats have made closing the doughnut hole a priority in recent years and have tried to make the new provision a key element in their appeal to seniors to support the health-care overhaul law.

New York Times: Health Care Payers Push Back Against Costs. By Uwe E. Reinhardt. Excerpts: My argument in the paper is that what is often called overuse of health care by what are often described as excessively insured Americans — especially their use of high-cost, high-tech procedures — is at best a partial explanation for the high cost of American health care. Yet cost-containment initiatives like high deductibles and co-insurance have taken use of health care as their chief target. These efforts will be only partly successful in controlling national health spending.

Equally important contributors to our high health spending, and probably more so, have been two other factors.

Earlier, in a 2003 paper, “Costs of Health Care Administration in the United States and Canada,” Dr. Steffie Woolhandler, Terry Campbell and Dr. David Himmelstein estimated that in 1999 total administrative costs of health insurers and all other parties in health care, save patients, accounted for 31 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada.

A second major factor accounting for high health spending per capita in the United States is the significantly higher prices Americans pay for virtually all health care services and products.

My thesis on this issue — expressed in the title of my paper — is that these much higher prices are the product of a deliberate strategy, hashed out in our political bazaars between the supply side of health care and state and federal legislators, always to keep the payment side of our health system fragmented and relatively weak vis à vis the supply side of health care.

Center on Budget and Policy Priorities: Georgia’s Tax Breaks to Increase Use of Health Savings Accounts Did Not Expand Health Coverage. Plan Promoted by Gingrich Group Has Failed to Deliver. By Jesse Cross-Call and Matt Broaddus. Excerpts: New data show that an approach to covering the uninsured that Newt Gingrich's Center for Health Transformation (CHT) largely designed and heavily promoted to Georgia policymakers — and that Georgia adopted in 2008 — has failed to produce the promised results.

The Georgia plan features multiple tax breaks to expand the use of Health Savings Accounts tied to high-deductible insurance plans. CHT claimed it would reduce the number of uninsured Georgians dramatically, but instead, the percentage of Georgians without insurance has substantially increased. In fact, since the law's enactment, the ranks of the insured have risen more rapidly in Georgia than in the rest of the South and in the nation as a whole.

These findings are relevant to ongoing debates over how to cover the uninsured. Not only Newt Gingrich, but also Presidential candidates Mitt Romney and Rick Santorum, as well as conservative policy organizations like the National Center for Policy Analysis, have called for repealing the Affordable Care Act and expanding Health Savings Accounts as a key part of the alternative.

News and Opinion Concerning the "War on the Middle Class"

"It is a restatement of laissez-faire-let things take their natural course
without government interference. If people manage to become prosperous, good. If they starve, or have no
place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility
of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better
hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the
rich. The pretense of the laissez-faire people is that only the
poor are dependent on government, while the rich take care of themselves.
This argument manages to ignore all of modern history, which
shows a consistent record of laissez-faire for the poor, but enormous
government intervention for the rich." From Economic
Justice: The American Class System, from the book Declarations
of Independence by
Howard Zinn.

Bill Moyers: Full Show: How Big Banks are Rewriting the Rules of our Economy (video). Introduction: Big banks are rewriting the rules of our economy to the exclusive benefit of their own bottom line. But how did our political and financial class shift the benefits of the economy to the very top, while saddling us with greater debt and tearing new holes in the safety net? Bill Moyers talks with former Citigroup Chairman John Reed and former Senator Byron Dorgan to explore a momentous instance: how the late-90’s merger of Citicorp and Travelers Group – and a friendly Presidential pen — brought down the Glass-Steagall Act, a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. In effect, says Moyers, they “put the watchdog to sleep.”

There’s no clearer example of the collusion between government and corporate finance than the Citicorp-Travelers merger, which — thanks to the removal of Glass-Steagall — enabled the formation of the financial behemoth known as Citigroup. But even behemoths are vulnerable; when the meltdown hit, the bank cut more than 50,000 jobs, and the taxpayers shelled out more than $45 billion to save it.

Senator Dorgan tells Moyers, “If you were to rank big mistakes in the history of this country, that was one of the bigger ones because it has set back this country in a very significant way.”

Now, John Reed regrets his role in the affair, and says lifting the Glass-Steagall protections was a mistake. Given the 2008 meltdown, he’s surprised Wall Street still has so much power over Washington lawmakers.

“I’m quite surprised the political establishment would listen to groups that have been so discredited,” Reed tells Moyers. “It wasn’t that there was one or two or institutions that, you know, got carried away and did stupid things. It was, we all did…. And then the whole system came down.”

How Wall Street and Washington got together and stacked the deck against the rest of us. Watch it here.

Business Week: Romney May Cost Private Equity as Pensions Warn of Backlash. By Cristina Alesci and Devin Banerjee. Excerpts: Mitt Romney’s campaign for the Republican presidential nomination may be costing his private- equity backers a lot more than they bargained for. Attacks by opponents portraying Bain Capital LLC, Romney and other buyout managers as corporate looters who enrich themselves at the expense of ordinary workers have put a spotlight on the industry that will affect negotiations about future investments, according to officials and trustees at public pensions. As firms struggle to raise funds, pensions may be more reluctant to commit money and may ask for more details on job creation and push for lower fees, these officials said. ...

Pensions, endowments and sovereign-wealth funds, which comprise the majority of so-called limited partners in buyout funds, have pressed for better payouts and data from global private-equity managers in the wake of the financial crisis. Some of the biggest investors formed the Toronto-based Institutional Limited Partners Association, which introduced guidelines in 2009 addressing fees, governance and communication with clients. Blackstone Group LP, KKR & Co. and TPG Capital are among firms that have signed on.

In addition to the fees, which eat into returns for pensioners, private-equity managers have also been criticized for paying a lower tax rate on much of their income than ordinary wage earners. Carried interest is taxed at the lower, 15 percent rate for capital gains, rather than the 35 percent top rate that applies to regular income. ...

Buyout profits and their tax treatment helped make buyout pioneers such as Stephen Schwarzman, co-founder of Blackstone and a supporter of Romney’s campaign, some of the richest Americans. Schwarzman, ranked the 66th-richest American by Forbes, held a fundraiser for Romney at his Park Avenue apartment on Dec. 14. He has opposed raising the tax on carried interest and endorsed a flat tax as part of comprehensive reform of the U.S. tax code. ...

Under pressure from rivals, Romney, whose wealth is estimated at between $190 million and $250 million by his campaign, this month disclosed tax returns showing he paid a 13.9 percent tax rate in 2010 on income of $21.6 million. ...

To mitigate the damage to private equity’s image, the industry’s lobbying group is starting a campaign to showcase its members’ contributions to the American economy, using testimonials of people who say private equity has helped their businesses grow. David Rubenstein, Carlyle’s co-founder, said Romney shouldn’t be criticized for the taxes he pays lawfully.

New York Times: Higher Taxes Help the Richest, Too. By Robert H. Frank. Taxes and regulation will occupy center stage in the presidential contest. One debate, for example, will focus on whether tax cuts for the wealthiest families should expire as scheduled at year-end — an issue that could gain traction now that Mitt Romney, the possible Republican nominee, has disclosed that he and his wife paid an effective federal rate of just 13.9 percent on their huge 2010 income. And on the regulation side, there will be attempts to repeal rules like the recently adopted Environmental Protection Agency standards that limit highly toxic mercury emissions.

Surveys indicate that most voters now favor higher taxes on the rich. But many wealthy people are determined to hang on to their tax cuts, and because recent changes in campaign finance law have greatly increased their political leverage, they may prevail. If so, however, it could prove a hollow victory.

Beyond some point, there seems to be little gain in satisfaction from bolstering your private spending. When mansions grow to 15,000 square feet from 10,000, for instance, the primary effect is merely to raise the bar that defines an adequate home among the superwealthy.

By contrast, higher spending on many forms of public consumption would produce clear gains in satisfaction for the wealthy. It’s reasonable to assume, for example, that driving on well-maintained roads is safer and less stressful than driving on pothole-ridden ones. ...

It would be one thing if lobbying against taxes and regulation brought wealthy Americans a world more to their liking. But if their goal is to buy a home with a more spectacular view, for example, they will be disappointed. There are only so many such homes to go around, and they’ll be bought by the very same people as before, since everyone will be bidding more. So when the anti-tax wealthy make campaign contributions, they are buying only the deeper potholes and dirtier air that inevitably result when tax revenue is low.

The case for continuing the George W. Bush tax cuts, at a cost of $3.7 trillion over 10 years (including interest), is shaky enough. The cuts for the wealthy alone, which President Obama would end, would cost with interest about $1 trillion over the next decade. But the GOP candidates want to continue all those cuts — and add many more, the vast bulk of which would again go to the wealthiest taxpayers.

Former Massachusetts governor Mitt Romney proposes additional cuts that would drain $180 billion from the treasury in 2015 alone, according to calculations by the Urban Institute-Brookings Institution Tax Policy Center. The nonpartisan center has not calculated the 10-year cost of the plan. But merely multiplying by 10 illustrates that Romney is talking trillions. ...

The centerpiece of the Romney plan is eliminating all taxes on investment income for taxpayers earning less than $200,000 per couple. Wealthier taxpayers would keep the 15 percent capital gains rate that allowed Mr. Romney and his wife to pay such a low share of their income in taxes. The corporate tax would be reduced from 35 percent to 25 percent. Like Mr. Santorum and Mr. Gingrich, Mr. Romney would eliminate the estate tax and the alternative minimum tax and would repeal new taxes on the wealthy contained in the health-care law and set to take effect in 2013. The benefits of his plan would be heavily skewed toward the wealthy. Millionaires would see an average tax cut of $146,000. Meanwhile, because Mr. Romney would let some lower-income Obama tax breaks lapse, taxes could actually increase on a significant share (between 16 and 20 percent) of taxpayers earning less than $50,000.

Huffington Post: The Party People of Wall Street. By Bill Moyers and Michael Winship. Excerpts: A week or so ago, we read in the New York Times about what in the Gilded Age of the Roman Empire was known as a bacchanal -- a big blowout at which the imperial swells got together and whooped it up.

This one occurred here in Manhattan at the annual black-tie dinner and induction ceremony for Kappa Beta Phi. That's the very exclusive Wall Street fraternity of billionaire bankers and private equity and hedge fund predators. People like Wilbur Ross, the vulture capitalist; Robert Benmosche, the CEO of AIG, the insurance giant that received tens of billions in bailout money; and Alan "Ace" Greenberg, former chairman of Bear Stearns, the failed investment bank bought by JPMorgan Chase.

This year, the butt of many a joke were the protesters of Occupy Wall Street. In one of the sketches, the bond specialist James Lebenthal scolded a demonstrator with a face tattoo, "Go home, wash that off your face and get back to work." And in another, a member -- dressed like a protester -- was told, "You're pathetic, you liberal. You need a bath!"

Pretty hilarious stuff. The whole affair's reminiscent of the wingdings the robber barons used to throw during America's own Gilded Age a century and a half ago, when great wealth amassed at the top, far from the squalor and misery of working stiffs. Guests would arrive in the glittering mansions for costume balls that rivaled Versailles, reinforcing the sense of superiority and the virtue of a ruling class that depended on the toil and sweat of working people.

Financial Times: ‘Davos consensus’ under siege. By Gideon Rachman. Excerpts: If nothing else, Newt Gingrich’s campaign for the US presidency has contributed an excellent new phrase to the language. His coinage – “pious baloney” – kept popping into my head in Davos last week, every time I saw the World Economic Forum’s ubiquitous slogan: “Committed to improving the state of the world”. ...

Shocking as it may seem, the assorted bankers, businessmen, oligarchs and autocrats who descend on Davos each year are not motivated principally by altruism. And yet Davos this year did feature much agonising about inequality. In a few cases, this may have reflected moral unease. But pragmatism was even more important. Davos is effectively a festival of globalisation for men in suits and snow boots – who now fear that the argument for globalisation may be lost in the west. ...

Peter Mandelson, a former EU trade commissioner, caught the mood when he told a lunch that politicians need to persuade people that globalisation and free trade are still good, even when they are blamed for higher unemployment and stagnant wages. From the platform came numerous suggestions of how this might be done: stimulate growth in Europe, invest in education, get the Chinese and Germans to spend more. ...

Globalisation contributes to inequality in the west by creating a global labour pool that holds down wages, while boosting corporate profits. Before the financial crisis – when economies were growing strongly and credit was easy – the middle classes were able to share in the proceeds of growth by borrowing heavily, while the poor could be protected through generous social spending. But now, with a credit crunch and pressure to cut welfare budgets, these adjustment mechanisms are much weaker.

Huffington Post: Working Poor: Almost Half Of U.S. Households Live One Crisis From The Bread Line. By Alexander Eichler. Excerpts: What does it mean to be poor? If it means living at or below the poverty line, then 15 percent of Americans -- some 46 million people -- qualify. But if it means living with a decent income and hardly any savings -- so that one piece of bad luck, one major financial blow, could land you in serious, lasting trouble -- then it's a much larger number. In fact, it's almost half the country. ...

According to the report, 43 percent of households in America -- some 127.5 million people -- are liquid-asset poor. If one of these households experiences a sudden loss of income, caused, for example, by a layoff or a medical emergency, it will fall below the poverty line within three months. People in these households simply don't have enough cash to make it for very long in a crisis. ...

That's not to say that everyone who is liquid-asset poor spends all their time fretting. On the contrary, because many have regular paychecks coming in, they may not grasp the precariousness of their situation. "They don't necessarily realize how close people can be to one interruption to income or one interruption to health benefits," said David Rothstein, the project director for asset building at the non-profit Policy Matters Ohio. "They're one paycheck away from being in debt."

Huffington Post: Real Wages Fell In 2011 Amid Record Corporate Profits. By Bonnie Kavoussi. Excerpts: A new report out Tuesday shows that working Americans made less money last year, as real wages fell about two percent in 2011, when accounting for inflation, according to the Bureau of Labor Statistics. The problem is largely tied to unemployment. Even as the jobless rate falls from recession highs -- dropping to 8.5 percent in December -- the large number of unemployed people willing to work for less has pushed down wages, said Gary Burtless, a labor economist at the Brookings Institution. ...

Chris Christopher, senior principal economist at IHS Global Insight, said that the U.S. economy is now stuck in a catch-22: Companies are not hiring in the U.S. because they do not expect the economy to improve, but the economy will not pick up until companies speed up their hiring. So for now, companies are keeping wages and benefits low while working their employees harder -- because they can.

Washington Post: Fannie and Freddie don’t deserve blame for bubble. By Mark Zandi. Excerpts: There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren’t among them.

The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.

In other words, America’s mortgage securitization machine was fundamentally broken. It created millions of mortgage loans that, even under reasonable economic assumptions, stood little chance of being repaid — and were not. As a result, hundreds of billions of dollars were lost as defaults and write-downs brought the financial system, and the wider economy, to the brink, requiring a massive government bailout.

Also to blame, of course, were regulators, who gave the private mortgage market little, if any, oversight. The market’s watchdogs were lulled to sleep by a misplaced view that self-interested private financial institutions would regulate themselves. This flawed thinking was most pervasive at the nation’s most important financial regulatory agency, the Federal Reserve.

Washington Post: Mitt Romney relying heavily on small group of super-rich donors. By Dan Eggen and T.W. Farnam. Excerpts: One of Mitt Romney’s strongest assets as the GOP presidential front-runner is also a potentially serious liability in the race: his heavy reliance on a small group of millionaires and billionaires for financial support. A quarter of the money amassed by Romney’s campaign and an allied super PAC has come from just 41 people, each of whom has given more than $100,000, according to a Washington Post analysis of disclosure data. Nearly a dozen of the donors have contributed $1 million or more.

The preponderance of mega-rich supporters poses a political challenge for Romney, who has struggled for weeks over questions about his vast wealth, his history as a private equity manager and a series of gaffes that seemed to highlight his privileged station. He stumbled again on Wednesday when he told a CNN interviewer that he was “not concerned about the very poor, because they have a safety net.”

Some of Romney’s biggest supporters include executives at Bain Capital, his former firm; bankers at Goldman Sachs; and a hedge fund mogul who made billions betting on the housing crash. These and other donor details follow the release last week of Romney’s tax returns, which showed millions held in the Cayman Islands and other overseas havens and a tax rate that is far lower than that paid by most American workers. ...

“Of course these guys are going to give a million dollars,” Franken said. “What a bargain — what a bargain to give that to a candidate who they know will veto a bill that makes the carried interest subject to the top” income tax rate. ...

The president has acquired nearly half of his campaign war chest from small-money donors, raising more from contributions of $200 or less than the Romney campaign has brought in overall, disclosure data show. Romney’s GOP rivals also have raised a larger proportion of their money from small donors.

Financial Times: Super-Pacs erode Obama's advantage. By Richard McGregor. Excerpts: Republicans are rapidly eroding the huge funding advantage that propelled Barack Obama into the White House, with wealthy donors flooding new conservative campaign groups with cash before the presidential election in November. The super-political action committee backing Mitt Romney, the Republican frontrunner for the 2012 nomination, raised $30m last year, according to filings with the Federal Election Commission published on Wednesday, with 10 individuals and corporations donating $1m each.

One conservative campaign group cofounded by Karl Rove, former adviser to George W Bush, which includes a super-Pac, raised $51m by the end of 2011, raking in $7m in two donations from a single Texas businessman, Harold Simmons. ...

Mr Rove's Crossroads group aims to raise more than $200m before November's election to spend against Mr Obama and Democratic candidates for Congress. Most of its donors, however, have not been declared as $33m of the $51m was donated to a body established under the tax code, Crossroads GPS, that does not require disclosure. American Crossroads, Mr Rove's super-Pac, raised $18m.

Financial Times: Attack of the super-Pacs. By Richard McGregor and John Dunbar. Excerpts: Every US election has the potential to change the world but the November poll has much deeper domestic implications, as a historic referendum on the size and scope of government and on President Barack Obama’s demands that the wealthy pay more tax. In a way that the country has not experienced since the era of Richard Nixon, the election process will be driven by an influx of unlimited cash from super-rich Americans and shadowy campaign organisations that can hide their donors.

“We are reliving a history of scandal and corruption that takes us back to Watergate days,” said Fred Wertheimer of Democracy 21, a Washington non-profit organisation that promotes campaign finance reform.

The new campaign landscape was shaped by two court decisions in 2010, which spawned the super-Pacs – campaign organisations that can take unlimited money from corporations, individuals and unions to spend on elections. ...

The super-Pacs’ donors for 2011 were released on Tuesday, providing the first full accounting of how they had raised their money last year. Harold Simmons, a Texas businessman with interests in chemicals and waste management, and a longtime backer of conservative causes, gave $8.6m to three different super-Pacs in the final quarter of last year. The biggest super-Pac supporting Mr Romney, Restore Our Future, took in $30m, with 10 individuals and companies giving $1m each.

However, the $49m figure does not include the $10m that Las Vegas casino magnate Sheldon Adelson and his wife gave in January to the main pro-Gingrich super-Pac, Winning Our Future, which will be disclosed formally in a few weeks. ...

Meredith McGehee of the Campaign Legal Center, a Washington-based organisation that scrutinises campaign finance, says that thanks to the courts, the political system is now a “world of unlimited money ... The few rules on the books can be easily circumvented by anyone trying to influence elections, and that is what has happened”.

The Smirking Chimp: The Democrats Who Unleashed Wall Street and Got Away With It. by Robert Scheer. Excerpts: At least Summers, in a testier interview by British journalist Krishnan Guru-Murthy of Channel 4 News, was asked some tough questions about his responsibility as Clinton’s treasury secretary for the financial collapse that occurred some years later. He, like Clinton, still defends the reversal of the 1933 Glass-Steagall Act, a 1999 repeal that destroyed the wall between investment and commercial banking put into place by Franklin Roosevelt in response to the Great Depression.

“I think the evidence is that I am right about that. If you look at the big players, Lehman and Bear Stearns were both standalone investment banks,” Summers replied, referring to two investment banks allowed to fold. Summers is very good at obscuring the obvious truth—that the too-big-to-fail banks, made legal by Clinton-era deregulation, required taxpayer bailouts.

The point of Glass-Steagall was to prevent jeopardizing commercial banks holding the savings of average citizens. Summers knows full well that the passage of the repeal of Glass-Steagall was pushed initially by Citigroup, a mammoth merger of investment and commercial banking that create the largest financial institution in the world, an institution that eventually had to be bailed out with taxpayer funds to avoid economic disaster for millions of ordinary Americans. He also knows that Citigroup—where Robert Rubin, who preceded Summers as Clinton’s treasury secretary, played leading roles during a critical time—specialized in precisely the mortgage and other debt packages and insurance scams that were the source of America’s economic crisis.

The Smirking Chimp: China Cheating Costs 400K Auto Parts Jobs. By Dave Johnson. Excerpts: This week three new reports described even more continuing damage to our economy caused by China's trade cheating -- and our own lack of response. Even as the auto industry recovers and auto-assembly jobs are returning, the auto-parts industry and jobs are not. ...

New York Times op-ed: Romney Isn’t Concerned. By Paul Krugman. Excerpts: If you’re an American down on your luck, Mitt Romney has a message for you: He doesn’t feel your pain. Earlier this week, Mr. Romney told a startled CNN interviewer, “I’m not concerned about the very poor. We have a safety net there.”

Faced with criticism, the candidate has claimed that he didn’t mean what he seemed to mean, and that his words were taken out of context. But he quite clearly did mean what he said. And the more context you give to his statement, the worse it gets.

First of all, just a few days ago, Mr. Romney was denying that the very programs he now says take care of the poor actually provide any significant help. On Jan. 22, he asserted that safety-net programs — yes, he specifically used that term — have “massive overhead,” and that because of the cost of a huge bureaucracy “very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them.”

This claim, like much of what Mr. Romney says, was completely false: U.S. poverty programs have nothing like as much bureaucracy and overhead as, say, private health insurance companies. As the Center on Budget and Policy Priorities has documented, between 90 percent and 99 percent of the dollars allocated to safety-net programs do, in fact, reach the beneficiaries. But the dishonesty of his initial claim aside, how could a candidate declare that safety-net programs do no good and declare only 10 days later that those programs take such good care of the poor that he feels no concern for their welfare?

Also, given this whopper about how safety-net programs actually work, how credible was Mr. Romney’s assertion, after expressing his lack of concern about the poor, that if the safety net needs a repair, “I’ll fix it”? ...

Still, I believe Mr. Romney when he says he isn’t concerned about the poor. What I don’t believe is his assertion that he’s equally unconcerned about the rich, who are “doing fine.” After all, if that’s what he really feels, why does he propose showering them with money? And we’re talking about a lot of money. According to the nonpartisan Tax Policy Center, Mr. Romney’s tax plan would actually raise taxes on many lower-income Americans, while sharply cutting taxes at the top end. More than 80 percent of the tax cuts would go to people making more than $200,000 a year, almost half to those making more than $1 million a year, with the average member of the million-plus club getting a $145,000 tax break.

eWeek: Apple, Foxconn and the Human Cost of Electronics Manufacturing in China. By Wayne Rash. Excerpts: The recent uproar about the conditions in Chinese factories where Apple's iPhones, iPads and iPods are manufactured is getting a lot of attention, partly because of an article in the New York Times. A great deal more attention is likely due to the lead story that appeared on CBS Sunday Morning on Jan. 29, in which a network reporter visited Shenzhen, China, site of the Foxconn factory where Apple's products are assembled.

The CBS segment graphically showed the suicide prevention nets at the factory, it showed workers reportedly as young as 12 who worked shifts as long as 12 to 14 hours a day, six days a week. It also reported on the death of one worker who died at work after a shift of more than 30 hours. There's no question that these conditions approach the emotional feeling of slavery, if not the legal definition. What's missing from the conversation is that Foxconn builds electronics products for a wide variety of companies, not just Apple.

In fact, there's a good chance that the smartphone in your pocket, the laptop on your desk or the tablet in your briefcase was assembled by Foxconn. If it wasn't, it was probably assembled by another Chinese contract manufacturer that operates in a manner similar to Foxconn. Regardless of what company has its logo on your consumer electronics, it's a virtual certainty that it was manufactured in China in a factory very similar to the one where your iPad was made. ...

Your iPhone was once a collection of parts that is often assembled by children who will never have time to play, get a decent education or know much about anything except assembling electronic components until they are too old or worn out to keep working. We bought that iPhone at a great price without a thought of what the social costs are in a country half a world away.

Wall Street Journal: With Tax Break, Corporate Rate Is Lowest in Decades. By Damian Paletta. Excerpts: U.S. companies are booking higher profits than ever. But the number crunchers in Washington are puzzling over a phenomenon that has just come into view: Corporate tax receipts as a share of profits are at their lowest level in at least 40 years. Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That's the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008. ...

Earlier this week, the CBO raised its projection for the government's 2012 budget deficit from $973 billion to close to $1.2 trillion, in part because of "disappointingly low corporate tax receipts of the sort that's a little puzzling," CBO director Douglas Elmendorf said. The CBO cut its projections for 2012 corporate income taxes from $279 billion to $251 billion. It expects them to rebound to $427 billion in 2014 as the tax breaks ends.

Huffington Post: Corporate Taxes As Percentage Of Profits Now Lowest In Decades. By Alexander Eichler. Excerpts: As a percentage of ever-growing profits, corporations are paying less in taxes than they have in decades. Thanks in part to federal tax breaks, corporations paid out just 12.1 percent of their 2011 profits in taxes, according to the Congressional Budget Office. That's well below the country's top marginal corporate tax rate of 35 percent -- and as The Wall Street Journal notes, it's the lowest percentage corporations have paid since 1972. During the two previous decades, a period that included the economic prosperity of the 1990s and the housing boom of the George W. Bush administration, corporations were paying an average percentage almost twice as high.

The CBO's numbers undercut a popular conservative claim -- that the United States places a higher tax burden on its corporations than almost any other first-world nation -- and arrive at a time when national politicians are engaged in a fierce rhetorical battle over how much wealthy institutions and individuals should pay to the government.

Huffington Post: Eric Schneiderman Sues BofA, Wells Fargo, JPMorgan Chase Over Electronic Mortgage Fraud. By Loren Berlin. Excerpts: Three big banks were hit on Friday with yet another lawsuit related to wrongful foreclosures. Democratic New York Attorney General Eric Schneiderman filed suit against Bank of America, JP Morgan Chase and Wells Fargo for deceptive and fraudulent use of a private database used to register mortgages, according to a Friday press release from his office.

Schneiderman has been outspoken in urging the Obama administration to hold the nation's largest financial institutions accountable for their role in the foreclosure crisis, notably hesitating to join a larger nationwide case against the country's five largest banks for mortgage fraud. States now have until Monday, according to the Iowa attorney general's office, to decide to join that deal. ...

About a year ago, Schneiderman was selected to join the small group of state attorneys general partnering with the Obama administration to negotiate a deal for desperate borrowers struggling to keep their homes. Under the proposed settlement, Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC would provide $25 billion in homeowner assistance as retribution for their mortgage-related wrongdoings, which include wrongful foreclosures and forged documents. Schneiderman eventually left the negotiations over fears that the settlement would release the banks from future lawsuits.

Mother Jones: Soaking the Poor, State by State. By Kevin Drum. Excerpts: You have heard, perhaps, that rich people in America are egregiously overtaxed. And the poor? They're the lucky duckies! Why, 47 percent of Americans pay no taxes at all!

(This is not true, of course. Many poor and elderly Americans pay no federal income tax, but they pay plenty of other taxes.)

Still and all, it's true that the federal income tax is indeed progressive. Conservatives are right about that—though it's not as progressive as it used to be, back before top marginal rates were lowered and capital gains taxes were slashed in half. But conservatives are a little less excited to talk about other kinds of taxes. Payroll taxes aren't progressive, for example. In fact, they're actively regressive, with the poor and middle classes paying higher rates than the rich.

And then there are state taxes. Those include state income taxes, property taxes, sales taxes, and fees of various kinds. How progressive are state taxes?

Answer: They aren't. The Corporation for Enterprise Development recently released a scorecard for all 50 states, and it has boatloads of useful information. That includes overall tax rates, where data from the Institute on Taxation and Economic Policy shows that in the median state (Mississippi, as it turns out) the poorest 20 percent pay twice the tax rate of the top 1 percent. In the worst states, the poorest 20 percent pay five to six times the rate of the richest 1 percent. Lucky duckies indeed. There's not one single state with a tax system that's progressive. Check the table below to see how your state scores.

If you hire good people and treat them well, they will try to do a good job.
They will stimulate one another by their vigor and example.
They will set a fast pace for themselves.
Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will
share in its sucess, they will contribute in a major way.
The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders.
—Thomas J. Watson, Jr., from A
Business and Its Beliefs: The Ideas That Helped Build IBM.

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